An economic model becomes a class politics when its prescription is to put people out of work. In this Jacobin interview with David Moscrop, researcher Silas Xuereb traces how the Phillips curve moved from an observed relationship between unemployment and wage inflation into a justification for restraining workers’ bargaining power.
- Bill Phillips’s original 1950s research concerned unemployment and wage inflation in Britain; American economists extended the relationship in the 1960s.
- The stagflation of the 1970s complicated the simple trade-off. Xuereb argues that an observed correlation never established a universal, one-to-one causal relationship.
- The Volcker shock, beginning in 1979, illustrates the distributional stakes: fighting inflation through sharp interest-rate increases came with unemployment and immense costs for workers.
- Xuereb attributes post-pandemic inflation to supply-chain disruption and corporate margin expansion rather than excessive wage demands. A policy response should diagnose the particular causes, not automatically squeeze employment.
- Fiscal policy is another possible tool, but whose taxes rise matters. Calling monetary policy technocratic does not erase its effects on class power.
The argument isn’t that unemployment and inflation never interact. Xuereb explicitly acknowledges that they sometimes do, and suggests that weaker labor bargaining power helps explain why the relationship has changed.
The useful question is who bears the cost of price stability—and who gets to decide. Treating worker insecurity as the default remedy hides a political choice inside an apparently neutral model.